Can you have options turn into stock before expiration?

For example, lets assume I own a naked put on DO, and it is now a little below the strike price of the put, but the premium I got paid for writing the put is still worth more, however, I would not mind owning the stock.

Do I need to do:

1) Tell them I would like the stock put to me, so that if its still below strike price at expiration, I receive the stock?

2) Tell them I would like the stock put to me right now? For example, I receive the stock, but don't get to keep all of the premium since some time value remains, or would I just need to close out the option and buy the stock if its before expiration and I am afraid the stock will go up in value above the strike price by expiration?

3) Buy a call option to protect me from missing a good price on the stock, and then if the stock is now above the strike on the put, I can use the call to take ownership of the stock assuming I inform them that I want the stock and that its above the call price for example, I buy an in the money call?

Your questions have been answered many times before, please use the search function if you think oyu have a basic question that may be addressed.

For example, lets assume I own a naked put on DO, and it is now a little below the strike price of the put, but the premium I got paid for writing the put is still worth more, however, I would not mind owning the stock.

Do I need to do:

1) Tell them I would like the stock put to me, so that if its still below strike price at expiration, I receive the stock?

-If your short put is in the money at expiration, you will be automatically put the stock, and the cash will be debitted from your account as well.

2) Tell them I would like the stock put to me right now? For example, I receive the stock, but don't get to keep all of the premium since some time value remains, or would I just need to close out the option and buy the stock if its before expiration and I am afraid the stock will go up in value above the strike price by expiration?

-The holder of the put option, not the seller, has the right to put the stock to you. You have no say in whether or not this happens. You can however, buy back your put at any time, closing your position. you could then buy the stock in the market.

3) By a call option to protect me from missing a good price on the stock, and then if the stock is now above the strike on the put, I can use the call to take ownership of the stock assuming I inform them that I want the stock and that its above the call price for example, I buy an in the money call? [/B][/QUOTE]

-You can always do this. Regardless of your other position, you can buy an in the money call to "lock-in" a price, so that if the stock goes up you only pay the price of the call + the strike price of the option. If you are short a put and long a call, this is called a synthetic long position- you are actively participating in the upside and downside of the stock.

NO, you cannot call your broker and say you want early assignment on a put. Assignment is determined by the OCC and the notices get sent to your broker. Assignment notices are sent to brokers in bundles on a random basis to provide fair market (They use a big tumbler to mix up all the assignment cards and pick them out at random), they bundle up the cards and put them in a courierpackage and send them via courier or bicycle messenger (this is why they charge per contract and an assignment fee, to pay the couriers salary and delivery costs, lunch) . Then the Broker who receives these bundles of notices will either to a Random basis (use a tumbler, pick them out at random and stamp on the card your account ID then send those to the cage via pneumatic tubes) or first in first out basis when determining who gets put stock (or get stock called away)

The cage will get your stock certificates, fill out the paper work to transfer stock to/from your account, or to deliver out to the other broker (if stock is called away)

Folks in general will not exercise a Put that has more extrinsic value VS the carrying cost.

Thanks for the replies. I have freed up some money in my account in case I am assigned on 1 of the puts, I will keep this money available until the option expires.

I have decided if the stock reaches a certain price say due to the general market falling, although that seems strange with the rally in both oil and stocks today, I will buy calls to lock in a possible bounce back up.

Otherwise, if the put options expire worthless, I will then deploy cash once again to into other positions or options.